Practice Leaders: Richard P. Eckman and Audrey D. Wisotsky
Federal and state regulation. New product development. Loan procedures and documentation. Secondary mortgage markets. Subprime mortgages. Option ARMs. Name the issue for mortgage banking clients, and chances are Pepper Hamilton LLP has experience with it. Our clients include state and federally chartered banks, savings and loan associations and credit unions, mortgage bankers, mortgage brokers and holding company affiliates and subsidiaries. In fact, we regularly handle mortgage banking matters for some of the largest mortgage banking companies in the United States.
Federal and State Regulatory Compliance
We help financial institutions and mortgage bankers comply with federal consumer credit protection statutes and related regulations such as the Truth-in-Lending Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Community Reinvestment Act, and Fair Credit Reporting Act, etc., and with the statutes and regulations of all 50 states dealing with mortgage loans to consumers, and the licensing and regulation of lenders, brokers and servicers. We also advise financial institutions and mortgage bankers in areas of federal preemption affecting their lending activities.
We help clients with new product design and implementation, including preparing documentation, disclosures and procedures for mortgage products ranging from traditional products, such as standard adjustable rate mortgage loans and home equity lines of credit, to innovative reverse annuity mortgage products and price-level adjustable mortgages, and non-traditional products such as option ARMs.
We also help clients in such areas as:
- due diligence
- organizational structuring
- specific loan transaction problems
- mortgage fraud prevention and advice
- responding to alleged violations of applicable laws and regulations
- federal and state investigations
- affiliated business arrangements
- litigation, including defending against class actions.
Pepper also conducts detailed reviews of the forms and procedures used by lenders to assure their compliance with applicable federal and state requirements. This involves the review of consumer credit forms, loan applications, adverse action notices, commitment letters, interest rate lock in agreements, notes, mortgages and deeds of trust, security instruments, Truth-in-Lending and ARM disclosures, home equity line of credit agreements and related materials, advertisements, compliance and procedures manuals, and written internal memos of instructions to loan officers. Secondary Markets and Servicing
We also handle a variety of secondary mortgage market issues, including those affecting mortgage loan origination and servicing operations, mortgage wholesale and correspondent arrangements, the purchase and sale of mortgages and mortgage servicing and subservicing rights, various aspects of the securitization of mortgage loans, and loan documentation, including state and federal disclosures.
We handle purchase and sale transactions of portfolios, develop model forms and procedures, advise on complex, unusual or troublesome issues, and conduct in depth surveys, analysis training and reporting on aspects of state law and regulation affecting large-scale, nationwide mortgage loan originators, purchasers, servicers and subservicers.
Our representation of mortgage banking companies includes those that focus on Alt. A and subprime mortgages. We have represented a number of national lenders and others focusing on this marketplace and have advised those on the recent federal regulatory focus on non-traditional mortgages and the myriad of state and local legislation regulating these types of products.
- preparing program documents for nationwide mortgage lenders’ correspondent purchase programs
- licensing of mortgage lenders nationwide, including several nationwide subprime lenders
- representing mortgage lenders with respect to agreements with master servicers
- preparing 50-state surveys of state laws and regulations affecting mortgage lending activities
- representing various banks and financial service companies with respect to the bulk purchase of mortgage loans
- representing banks, thrifts and financial services companies in secondary mortgage market transactions, including the sale and purchase of mortgage loan portfolios and servicing agreements
- preparing comprehensive loan documentation, including state and federal disclosures
- negotiating outsourcing agreements with third parties and servicers
- advising clients on all aspects of securitization of mortgage loans, including reconstituted servicing agreements and related issues in connection with the securitization of mortgage loans including conduits
- preparing and negotiating warehouse lending agreements
- advising clients regarding the issues facing subprime lenders and their financial challenges
- representing a large foreign bank on its entry into the national mortgage market for high net worth individuals
- representing one of the largest private banking groups of a top financial holding company regarding all aspects of its national mortgage lending program to high net worth individuals.